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D.C. Week: HHS Puts PBMs’ Rebates in Crosshairs

WASHINGTON — A proposal announced Thursday would end the rebates drugmakers pay to pharmacy benefit managers — which came on the heels of several congressional hearings focusing on high drug prices. Also, FDA Commissioner Scott Gottlieb outlined how the agency plans to make better use of real-world data in its drug and device evaluations.

HHS Proposes Scrapping Rebates to PBMs, Giving Discounts to Patients

Secretary of Health and Human Services (HHS) Alex Azar announced radical changes to the way drugs are paid for in a new proposed rule aimed at lowering out-of-pocket costs for patients, especially seniors.

Speaking Friday at the Bipartisan Policy Center here, Azar called the new rule the “single biggest change to the way American drugs are priced at the pharmacy counter ever.”

It would curb drug manufacturers’ practice of paying rebates to pharmacy benefit managers (PBMs), which the administration and others have criticized as one of the more important ways that keep drug prices high for patients.

Two senior House Democrats quickly attacked the proposal, but independent scholars were more inclined to take a wait-and-see attitude.

House Drug Price Hearing Takes Aim at Industry

Pharmaceutical companies were pummeled during Tuesday’s hearing of the House Committee on Oversight and Reform. The panel’s first hearing of the 116th Congress examined the reasons for rising drug prices and follows committee chairman Elijah Cummings’ (D-Md.) launch of an aggressive investigation into pharmaceutical pricing issues.

“For the past decade I’ve been trying to investigate the actions of drug companies for all sorts of drugs — old and new, generic and brand name,” Cummings said as the session began. “We have seen time after time drug companies make money hand over fist by raising the prices of their drugs often without justification and sometimes overnight while patients are left holding the bills.”

Midway through the hearing, Rep. Mark Meadows (R-N.C.), chairman of the conservative House Freedom Caucus, told Cummings that President Donald Trump wanted to work with Democrats to lower prescription drug prices. Cummings said he welcomed the offer.

House Panel Mulls ACA Fixes, Responses to Trump Policies

Focusing on preventive care, expanding subsidies, and regulating association health plans (AHPs) were among the solutions proposed Tuesday to aid Americans with pre-existing health conditions, as the U.S. House Ways and Means Committee held its first hearing under the new Congress.

The Affordable Care Act (ACA) forced insurance plans to accept and retain members with pre-existing conditions, many of whom could not afford plans before the legislation was enacted. But Trump administration policies and other reforms worry some experts and lawmakers that the millions of American with pre-existing conditions — ranging from moderate mental health diagnoses to cancer — are gradually being priced out of the healthcare system again, they said.

Many witnesses spoke against the administration’s policy to loosen regulations on cheaper short-term plans that do not have to abide by ACA strictures. “The expansion of these plans does not help the consumer,” Brooks-Coley said. “It puts them at increased risk. … They are only less expensive upfront because they don’t cover [serious conditions].” In addition, Pollitz noted, many of these plans drop patients once they become ill and “have been shown to increase costs of ACA-compliant plans.”

Senate Lawmakers Talk Drug Pricing Fixes: ‘It Starts With Transparency’

Drug price transparency was touted by legislators at a Senate Finance Committee hearing Tuesday.

“I think it starts with transparency,” said Sen. Chuck Grassley (R-Iowa), the new chair of the committee, who added that patients shouldn’t need a PhD in economics in order to know what their drugs cost.

Grassley said he supports the Trump administration’s proposal and pending legislation that would require pharmaceutical companies to post the list price of a drug in direct-to-consumer advertising.

Ranking member Ron Wyden (D-Ore.) pressed for more transparency with regard to pharmaceutical benefit managers (PBMs), the middlemen between drug companies and insurers. PBMs have been targeted lately by the Trump administration; the latter has suggested PBMs are skimming profits instead of holding down costs.

Gottlieb Puts FDA at Forefront for Leveraging Real-World Data

FDA Commissioner Scott Gottlieb, MD, described new efforts to leverage real-world evidence in clinical trials during a briefing at the Bipartisan Policy Center.

At the Monday briefing, Gottlieb announced a 2-year “competitive fellowship” program focused on artificial intelligence (AI) and machine learning. Post-doctoral fellows from top universities will be invited to work alongside mentors from the FDA’s medical product center to design “high-impact AI-based regulatory science tools,” Gottlieb said.

He also said he wants to use digital technology to bring clinical trials to the patient, through “decentralized trials,” as they are known, which leverage resources such as electronic health records and wearable devices. These trials will reach more diverse populations, better reflect real-world use of products, and allow providers and patients to make more informed treatment decisions, Gottlieb said.

More $$ Needed for Health Centers, Senators Told

The federal government needs to provide more reliable funding for community health centers and the National Health Service Corps (NHSC), and more money wouldn’t hurt either, several witnesses said Tuesday at a Senate Health, Education, Labor, & Pensions (HELP) Committee hearing on healthcare providers in underserved communities.

“We were very grateful that in 2018, Congress generously brought the per-resident allocation back up to a more sustainable level,” said John B. Waits, MD, CEO of Cahaba Medical Care, a community health center (CHC) with 10 sites, based in Centreville, Alabama. “But the last two reauthorizations were each for 2 years and didn’t always provide sufficient certainty for teaching health centers to make binding 3-year commitments for the recruits we were authorized to hire and train … What a difference it will make if Congress gives us stable funding for 5 years. We can budget more efficiently and keep our doors open.”

“I’m here to ask your help in funding this incredibly important program,” said Andrea Anderson, MD, director of family medicine at Unity Health Care, a CHC here, and part of the center’s graduate medical education faculty. “Without action before October, the NHSC will once again face a funding cliff.”

Next Week

On Monday and Tuesday, Academy Health hosts the National Health Policy Conference.

On Tuesday, the Senate Health, Education, Labor, & Pensions Committee will examine the impact of primary care on health costs and patient outcomes.

And the Senate Appropriations Committee will discuss the Department of Veterans Affairs’ efforts to modernize its electronic health record (EHR).

On Wednesday, the House Committee on the Judiciary will address strategies to prevent gun violence.

And a subcommittee for the House Committee on Energy and Commerce will assess the impact of Texas v. U.S. on Americans with pre-existing conditions.

On Wednesday and Thursday, the FDA’s Tobacco Products Scientific Advisory Committee will explore modified risk tobacco product applications and amendments to such applications for smokeless tobacco products from Swedish Match and Altria.